Saving is really hard to come by these days. In fact, I pretty much have no savings. Considering the fact that we have debt, I don’t find it useful to save while accruing pretty much 0 interest when we have to pay off cards that charge us heavy interest. However, I do believe saving is important as it allows for better money management, especially when times are tough. Eventually I will have much more than I do now, I sort of have a plan, once the cards are paid off, as savings was kind of my thing when I was growing up. Regardless, I do want to teach Emma the importance of saving. Because of my own experience of paying for college, buying an apartment and starting a family, I want Emma to learn how essential it is so that she can be better off in the future and know how to better manage her money. She is still only two, so for now, we have a container where she stuffs as many coins as she can find. To our advantage, she still doesn’t know that bills are worth more, because I am sure that when she figures that out we will have no money in our wallets as she often likes to go through them…
One of my best friends forwarded me the article below from The New York Times about Savings for kids and whether you should open up a bank account for your child or not and the author concludes with a good point – It doesn’t matter how your child saves, piggy bank or an actual bank account – what really matters are the lessons they learn from their parents. Thus, once Emma a little older and actually understands the concept of money, I plan on talking to her about the value of money and how it can make a difference, how she can make a difference – work towards goals and plan accordingly.
For now, I am looking for the best plan to get for Emma’s college – a big and overwhelming decision once you become a parent. Although I know firsthand the level of maturity and self-assurance you get from working and paying for college on your own, I don’t want Emma to feel limited in her college search, and so, I need to get a college plan for her. I read several articles about 529 plans and came across the article from Kiplinger listed below, which writes which plan is a better choice for you depending on the state you live in – pretty straight to the point. Basically, if the state you live in has an income-tax deduction for the contribution you make to the 529 plan, then you should go with your state’s college plan. If living in NY, then you should go with the state’s 529 college plan.
So, this will be the year that I open up Emma’s 529 College Savings Plan with the money she has received so far. I just have to figure out the monthly contribution amount we can afford.
Does anyone have any good/bad experience with 529 plans?